Meanwhile, OPEC resists pressure to speed up output increases: File Image/Pixabay
Yet more evidence that demand is outpacing global supply occurred on Friday as oil posted further gains as well as an 11 percent monthly gain – with analysts noting that even more demand recovery is ahead in the weeks and months ahead.
West Texas Intermediate rose 76 cents to settle at $83.57 per barrel, while Brent for December settlement climbed 6 cents to $84.38 per barrel (the more active January contract added 6 cents to end the session at $83.72 per barrel).
Pierre Breber, chief financial officer at Chevron Corp, pointed out that as commuting and air travel picks up, there's "strong demand across our products with more recovery expected" during the current quarter.
Alexander Novak, deputy prime minister, Russia
Demand [for oil] can decline as there is still uncertainty
Also, as analysts continue to debate the possibility that the Organization of Petroleum Exporting Countries (OPEC) and allies will increase output to lessen the severity of the expected energy crunch this winter, Chevron and Exxon Mobil Corp.'s better-than-expected earnings reported on Friday also suggested the possibility of increased output.
Chevron in fact reported its highest quarterly profit in eight years, with net income of $6.11 billion, or $3.19 per share, compared with a loss of $207 million, or 12 cents per share, a year ago.
But the majority opinion is that OPEC is the key to alleviating the crude shortages, and Bloomberg on Friday noted that "Behind closed doors an intense campaign is being waged to convince OPEC+ to speed up its output increases," with "the U.S., India, Japan, and other consuming countries are putting the strongest diplomatic pressure on the cartel in years."
However, OPEC de facto leader Saudi Arabia has so far refused to comply, stating that its current monthly 400,000 barrel per day (bpd) additions are enough at a time when the pandemic is retreating but could experience flare-ups that would impact demand.
This view was shared by Alexander Novak, deputy prime minister of Russia: he earlier told media, "Demand [for oil] can decline as there is still uncertainty."
Still, even the height of the Delta variant did nothing to dent demand, which may be why China reportedly canvased independent and state oil refiners last week for solutions to its energy shortage, which is already causing diesel to be rationed ahead of winter.
The National Development and Reform Commission asked questions such as whether refiners can raise processing rates to produce more fuel, whether they can import more diesel and gasoline, and if they can obtain crude at a reasonable price.
China's crude stockpiles were at 919 million barrels as of October 24, or 59 percent of the nation's storage capacity.